Targeted transparency

Posted by Thorsten Sellhorn - Nov 12, 2019

Nudging is a popular concept from behavioral economics that has also found its way into other (research) fields. With nudging positive reinforcement and indirect suggestions are used as ways to influence the behavior and decision making of groups and individuals. A classic example is that in order to help your employees make healthy food choices you could replace the jar with sweets at the reception desk with a bowl of fruit, therewith giving the employees a small push, a nudge, in the right (healthy) direction. As such, nudging is said to be an alternative way to achieve compliance, contrasting formal methods such as legislation. However, nudging and formal regulations can also go hand in hand. In a review on ‘targeted transparency’, which is transparency regulation aimed at nudging firms towards changing their business activities in socially desirable ways, we developed a framework that lays out the necessary conditions under which targeted transparency regulation can be effective and reviewed the emerging empirical evidence. Read more here.